Quo Vadis, Venezuela?

Sat 31st Dec 2016

Venezuela, after Hugo Chavez was elected president in 1998, became a beacon of socialism on the mainland of Latin America. Not since Allende became the continent’s first elected socialist in 1970 had the socialist project received such a boost. However, it wasn’t until 2005, seven years after his election, after having faced stiff opposition to his mildest reforms, that Chávez declared himself a socialist. Venezuela had the prerequisites for making socialism a success. It had the advantage that it was no poverty-stricken backwater, but a country rich in oil resources. Chavez, for the first time, used the money generated by oil exports to introduce an ambitious programme of poverty eradication, literacy campaigns and, with Cuba’s help, a comprehensive health care system among many other progressive projects.

The ‘Bolivarian revolution’ was aimed at overcoming the great divide in the nation, distributing the country’s wealth more equitably and introducing a socialist system. The early years of Chavez’s presidency were characterised by a new-found optimism in the country, a galvanising of activism and commitment on the part of the poor and working people who had, up to then, experienced little if anything of the country’s oil wealth trickling down to them. This was a great opportunity of demonstrating the superiority of socialism by bringing about a fairer wealth distribution and promoting social progress. Chavez and his government attempted to build Socialism within the context of a plural bourgeois democracy and without seriously undermining the oligarchies which had ruled the country up to then. The days of direct interference by Big Brother to the north were over, it seemed, even though the rhetoric against Chavez and the Bolivarian revolution remained strident.

Even before Chavez’s tragic early death, the early widespread euphoria was already ebbing and problems, particularly economic ones, refused to go away. Under President Maduro, his successor, things have become progressively worse. The big drop in world oil prices has not helped and the ramping up of a vehement right wing opposition to his presidency and to socialism itself within the country has not helped surmount the problems.

We also know that the USA, even if it has backed off from using armed force and direct intervention to undermine the progressive government in Venezuela, has been working its pants off behind the scenes, in ways similar to those used in Chile, to undermine the economy.

We on the left, outside Venezuela, have been inspired by the people’s attempt to build a new country free of oligarchs and domination by the USA and we have wholeheartedly supported its independence and right to freely choose its own destiny. However, in the face of the seeming economic chaos, endemic corruption and horrendous levels of crime, we cannot pretend that all is rosy in the country and simply blame the right-wing opposition, the USA and other forces for the problems even though they are playing significant roles.

Even if highly exaggerated in the western press, the economic and political crisis in Venezuela is real. Shortages are, of course, reported on with glee in the United States, and are seen as evidence of the failure of the Bolivarian Revolution and socialism.

The fact remains, however, that poverty, inequality, malnutrition, lack of healthcare, and chronic violence in Latin America owe more to the neoliberal structural adjustment policies enforced in the pre-Chavez era by Reagan and Clinton than political movements attempting to roll back those policies.

If socialism is to represent a viable and worthwhile alternative to capitalism, it must in the first instance prove its superiority on the economic front: overcoming waste, enthusing working people to contribute wholeheartedly to the social good, and demonstrating that co-operation is more efficient than competition and that wealth and wellbeing can be more equitably distributed. While the Bolivarian revolution went someway in achieving these goals, it appears to have lost its momentum and has fallen far short of expectations. Why has that happened? Let us look at some aspects.

The Chavez government made the decision to subsidise basic food products for the poor. On the face of it a worthy initiative, but in the context of capitalist economics a dangerous path. The German Democratic Republic did the same after the war to ensure fair distribution of basics, and while it was effective in the early, harsh post-war years, it outlived its purpose and led to a significant distortion in the economy. Many products were sold below their production costs and real worth. In some cases this led to misuse and wastage because they were so cheap. It also led, as long as the country had an open border to the West in Berlin, to smuggling and currency speculation. This was replicated in Venezuela with cheap, subsidized Venezuelan products being smuggled over the border to Colombia. And, because in Venezuela these subsidised goods were sold in special government shops, it also led to the alienation of small and medium-sized shopkeepers who lost an important part of their income.

The government has also held onto a thoroughly discredited currency control, and because of it has been obliged to move increasingly towards a dollar-based economy in more and more sections of the economy, both formally and informally.

Encouraged if not promoted by the USA and Venezuelan oligarchs, there have also been numerous instances of hoarding and the deliberate withholding of basic products from the market, like flour, coffee, eggs or rice, for instance. This has led to acute shortages, queues at shops, frustration and anger, particularly on the part of those the revolution hoped to win over. A news item from Venezuela just before Christmas was that the government had seized nearly four million toys from the warehouse of a toy distributor, which it planned to distribute to poor children, claiming the company was hoarding the goods.

While food is still available at inflated prices, medicines have become scarce, as are the dollars to purchase them. There is widespread rage among ordinary people directed at government corruption, incompetence, indecision, and most particularly at the military, all of which they see as the primary enemies of gains made over the previous decade. It is a crisis, simultaneously, of social inertia and political paralysis, across the political spectrum.

Every country faces the prospect of speculation against its currency by more powerful countries like the USA. This leverage is used intentionally by the USA in order to undermine governments it dislikes. In Venezuela, the government attempted to avoid this by pegging the Bolivar (Venezuela’s currency) to the dollar at a rate it decided upon. As the Bolivar lost value on the global exchanges, this ‘artificial’ rate became unsustainable and led to currency smuggling, dollar hoarding and further devaluation of the Bolivar, severely undermining the government’s fiscal measures. The recent withdrawal of high denomination notes and the issuing of new coins, is an attempt to counter this phenomenon, but has it come too late? The German Democratic Republic and the other East European socialist countries could get away with setting their own rates of exchange because their currencies were unconvertible on the global markets and their borders were sealed off from the capitalist world; they paid for necessary imports using gold or ‘hard currency’ reserves. Venezuela does not have this luxury of hermetic insularity.

Because of its enormous oil reserves which brought in valuable foreign currency, the Venezuelan regimes pre-Chavez had not bothered to promote the setting up of indigenous economic infrastructures or self-sustaining agriculture; they could afford to import all they needed. This situation left the country extremely vulnerable and dependent. Although Chavez made attempts to reverse this process and encouraged national agricultural production and also the establishment of state-owned or co-operative industries, it was too little and not effective enough. The country still remains largely dependent on imports.

Although crime and corruption are endemic and remain big problems for Venezuela, the country’s statistics pale into insignificance compared with Mexico for instance. There bodies are piling up faster than snow in Siberia. And we perhaps need reminding that it is the opposition that has blood on its hands, and is responsible for more political terror and assassinations than the supporters of the Bolivarian Revolution.

The Bolivarian Revolution promised a radical change from the previous political system, one that would overcome the country’s rigid two-party system that had stifled opportunities for political participation, and also brutally repressed them. This promise has been only partially fulfilled; we still have bi-polar politics and with an oligarchic-led opposition that will stop at nothing to regain power as the attempted coup in 2002 clearly showed.

The inability of the Bolivarian government to fully entrench itself and overcome the sabotage and relentless onslaught by the ruling class raises a vital question for socialists everywhere: is revolutionary change, insofar as it directly challenges the interests of entrenched elites, compatible with liberal democracy or even possible within that context? And what is the balance between social and economic rights, and civil and political rights?

Chávez attempted to achieve his aims by creating parallel institutions rather than replacing the old ones, in the process further stoking polarisation and leading to a larger concentration of power at the expense of organised popular sectors. The tension around the question of liberal, social democratic, or revolutionary paths to change also leads to contradictory and counterproductive confusion about the causes of the crisis.

In a recent article in The Nation (Christmas in Caracas? Worse Than the Grinch!) Greg Grandin, in conversation with the US-based academic and Latin American expert, Venezuelan Alejandro Velasco, addresses the dilemma facing Venezuela’s revolution from the point of view of a critical sympathiser.

He asks, what amid today’s crisis, is salvageable from the Bolivarian Revolution? ‘It is difficult,’ he writes, ‘to separate bad economic policy—like regressive subsidies and exchange controls—from examples of malicious sabotage, destabilisation campaigns, and widespread corruption. The former exacerbate the latter, and the two become blurred. And yet, as I wrote about this in a recent column, seeking fuller explanations is difficult. There’s a tendency to reduce the crisis to a simple narrative of oil dependency or socialism, but that’s fundamentally dishonest. The fact is that neither was Venezuela under Chávez as “socialist,” as critics insist, nor can oil dependency alone account for the severity of the current crisis. It’s the combination of a haphazard socialist program built atop a foundation of increased oil dependency against the virulent opposition of entrenched elites that most accounts for Venezuela’s mess.

Grandin continues, ‘The crisis then seems sui generis, since most socialist movements can’t expect, if they achieve power, to be awash in petrodollars. I guess the question is, why couldn’t Chávez, in the short space of a decade, turn Venezuela into Norway? But you’ve answered that in a way, by pointing out that he didn’t take power in a vacuum; rather, the possibilities of what he could achieve were determined by a sort of path dependency nearly a century in the making.

But what is the opinion of left social movements? Has the current situation led to a reassessment of first principles regarding the relationship of the state to social movements? Or of tactics? I’m thinking of the way the overthrow of Allende in Chile led to a broad critique among leftists of the Popular Unity electoral strategy? Venezuela is, obviously, a different situation, but what theoretical and tactical insights might we learn from the crisis?’

Velasco: ‘Opinions vary. Which makes sense, because left social movements were and are wide-ranging, precisely due to their different approaches to the state. These differences and their origins shape their views of the crisis, and of the lessons learned and to be learned.

Sympathetic internal critics of the way the Bolivarian Revolution has developed say that it moved too quickly to distribute resources massively without first generating opportunities for local-level organisations to surface independently.

By the time communal councils came around, those that emerged in areas with long traditions of organising were in a position to be most active and successful, and able to confront the current crisis. Under Chavez the government did sow potential seeds of a truly new form of social organisation, something that might be defined not just in negative terms, in opposition to neoliberalism, but by what it is, a different way of organising production and trade, but these have not been sufficiently developed or become strong enough to counter opposite tendencies.

Attempting to build a socialist revolution on the basis of a commodity boom is bound to generate problems,’ he says. ‘Then there’s a difference of opinion here in terms of pace. There’s also an important common thread that goes beyond questions particular to Venezuela and its historic dependence on oil. Where the two meet is in their shared sense that popular power is central to revolutionary change, but if it is to be successful, if it is to fundamentally transform society in the interest of long-disenfranchised sectors, especially in the face of organised opposition, it must begin from below, and it must be as comfortable outside as within the state.’

We have yet to see how a Trump presidency will impact on Venezuela. A Hillary Clinton victory would certainly have spelt a return to old-style gunboat diplomacy, but will an unpredictable and maverick Trump be any different? For Venezuelans, the difference between the two is unlikely to be significant. They can be certain that their struggle will not get any easier.